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CONGRESSIONAL PRINTING AND BINDING APPROPRIATION Our request of $84 million for the Congressional Printing and Binding Appropriation is an increase of $2.3 million, or 2.9 percent, over the total amount approved for fiscal year 1998, which includes the transfer from the revolving fund. The items covered by the request are as follows: (In millions of dollars)

Estimated Category

Requirement Committee hearings

19.7 Congressional Record (including the online Record, the Index, and the bound Record)

18.8 Miscellaneous Printing and Binding (including letterheads, envelopes, blank paper, and other products)

15.4 Bills, resolutions, amendments

12.8 Miscellaneous Publications (including the Congressional Directory, the U.S. Code, and serial sets)

5.2 Committee Reports

3.2 Business and Committee Calendars

2.0 Documents

2.0 Details to Congress

1.8 Committee Prints

1.6 Document Envelopes and Franks

1.5 Total

84.0 Product prices are anticipated to increase by approximately 4.7 percent overall due to the increased costs of employee compensation and benefits, utilities, maintenance, materials, and supplies. We are continuing to work to reduce these costs with savings from technological improvements and adjustments to staffing requirements.

The impact of price increases will be offset by a 1.8 percent reduction overall resulting from decreased workload volume in several product categories. Based on historical data, in the first session of the 106th Congress we expect to see decreases in workload for the Congressional Record, business and committee calendars, details to Congress, document envelopes and franks, committee prints, hearings, and documents. Historical data suggest there will be increases in miscellaneous publications (because of the production of the Congressional Directory and other publications for the new Congress), miscellaneous printing and binding, bills, resolutions, and amendments, and committee reports. While these estimates are based only on historical factors and represent our best estimates as to the projected workload for the first session of the 106th Congress, actual workload may vary.

We have been participating with both the House and the Senate in the development of new legislative information systems that will expand the capability to create and utilize electronic information products in Congress and potentially reduce GPO's printing costs. One objective of these systems is the adoption of Standard Generalized Markup Language (SGML) to permit the submission of machine-readable keystrokes requiring less processing by GPO prior to final production. We support initiatives in both Chambers to facilitate the sharing of information. In addition, we are now placing all Senate Appropriations Committee hearings online.

SALARIES AND EXPENSES APPROPRIATION Our request of $30.2 million for the Salaries and Expenses Appropriation of the Superintendent of Documents is an increase of $1.1 million, or 3.9 percent, over the amount approved for fiscal year 1998. The increase is due to increases in mandatory pay and related costs, price level changes, and workload changes. The component programs covered by the request are as follows: (In millions of dollars)

Estimated Program

Requirements Federal Depository Library Program

25.8 Cataloging and Indexing Program

3.5 International Exchange Program

.5 By-Law Distribution Program

.4 Total

30.2 Price level changes and cost increases due to pay raises and related expenses represent $818,000, or about 73 percent of the requested increase of $1.1 million. The majority of this amount, $570,000, is for price level changes calculated at the assumed rate of inflation for the year, or 2.6 percent. Approximately $225,000 is for enhancements to GPO Access to facilitate the continuing transition of the FDLP to a predominantly electronic basis. The balance is for capital expenditures for GPO's Library Programs Service.

We are requesting the Appropriations Committees to increase the statutory limitation on travel expenses under the Salaries and Expenses Appropriation from $150,000 to $180,000, in order to fund increased travel for depository library outreach, including instruction and training on the use of GPO Access.

BOUND CONGRESSIONAL RECORD House Report 104-657, accompanying H.R. 3754, the Legislative Branch Appropriations Act for 1997, directed GPO to reduce the distribution of paper copies of the bound Congressional Record beginning with the 105th Congress, and to produce a new CD-ROM format for this publication. A total of $100,000 was earmarked for the fiscal year 1997 Congressional Printing and Binding Appropriation for a more limited number of printed copies of the bound Record to be distributed at the direction of the Joint Committee on Printing (JCP).

The JCP has directed the distribution of about 205 sets of the bound Record to be funded from GPO appropriations, estimated to cost about $313,000. This includes $179,000 from the Congressional Printing and Binding Appropriation and $134,000 from the Salaries and Expenses Appropriation. In addition, we estimate that about 190 sets will be ordered and paid for by other Federal agencies and the public. Consistent with the direction of House Report 104-657, we plan to produce the sets on demand from an electronic database utilizing high-speed reproduction technology. This strategy will produce the relatively small number of copies required at a much greater savings. We have received the approval of the House Subcommittee on Legislative Appropriations to spend an additional $79,000 from our fiscal year 1997 Congressional Printing and Binding Appropriation and $134,000 from the Salaries and Expenses Appropriation for this purpose. Sufficient funds are available for this purpose.

CONGRESSIONAL SERIAL SETS House Report 104-657_also directed us to reduce the production and distribution of bound Congressional Serial Sets beginning with the 105th Congress. The direction was to convert most sets to CD-ROM format and to limit the distribution of bound sets to regional depository libraries, plus one depository in each state without a designated regional depository (including the District of Columbia), and to international exchange libraries.

We formulated a plan for the implementation of this directive that subsequently was approved by the JCP. The bound Serial Set will be distributed to all designated regional depository libraries and one library in each of seven states that do not have a designated regional depository. In addition, the international exchange libraries, the Library of Congress, the National Archives Library, the Senate Library, the House Library, and the Public Documents Library Collection (now housed within the National Archives and Records Administration) will continue to receive bound versions of the Serial Set. An estimated 105 copies of each volume of the set will be produced and distributed to these recipients. This quantity is 344 copies less per volume than was distributed prior to the 105th Congress (a total of 128 volumes are estimated for a Serial Set for an entire Congress).

The Superintendent of Documents has surveyed depository libraries to allow them the opportunity to add the initial slip distribution of the documents and reports of the 105th Congress in paper format, since the bound Serial Set will not be an option for most of them. In addition, we have accepted the suggestion of the Government Documents Roundtable of the American Library Association to make available copies of the Serial Set title pages (including the contents listing for each volume) to depository libraries that request them. We are also offering the bound Serial Set for the 105th Congress for sale through the Superintendent of Documents sales program.

At this time, it is not possible to create a complete electronic Serial Set with all the requisite capabilities, since many documents and reports are not currently available electronically and are too graphically intense to convert to an electronic format. We will work with the Clerk of the House of Representatives and the Secretary of the Senate, as well as ongoing efforts associated with information systems planning in both Chambers, toward the eventual production of a complete electronic Serial Set.

46-108 99-10

TRANSITIONING THE DEPOSITORY LIBRARY PROGRAM We are continuing to transition the FDLP to a predominately electronic basis, as directed by the Legislative Branch Appropriations Act for 1996, and as set forth in the plans contained in the Study_to Identify Measures Necessary for a Successful Transition to a More Electronic Federal Depository Library Program (June 1996). The transition process was estimated to require from five to seven years beginning in fiscal year 1996. The transition includes the dissemination of both tangible electronic Government information products, such as CD-ROM's, as well as online databases and locator services provided via GPO Access, our online Internet service. GPO Access is the principal delivery vehicle for online Government information to depository libraries and the public. Current trends indicate that online formats will eventually be the dominant means of electronic dissemination.

A key highlight of the transition process this past year was the development of the “collection management" concept for GPO Access, which establishes that we will manage the various electronic Government information products made permanently accessible via GPO Access as a library-like collection. This concept will consist of four elements: (1) core legislative and regulatory GPO Access products that will reside permanently on GPO servers; (2) other remotely accessible products either maintained by GPO or other institutions with which GPO has established formal agreements; (3) the tangible electronic Government information products distributed to Federal depository libraries; and (4) remotely accessible electronic Government information products which GPO identifies, describes and links to but which remain under the control of the originating agencies. Portions of the collection, other than the core legislative and regulatory GPO Access products, may be maintained at partner institutions, including other Federal agencies, depository libraries, consortia, or other institutions.

In 1997, we established the first partnerships under the collection concept with the University of Ilinois-Chicago, the University of North Texas, and the Online Computer Library Center (OCLC) Inc., to handle permanent public access to databases originating with the State Department, the now-defunct Office of Technology Assessment, and the Education Department, respectively. We have also developed a partnership with the Department of Energy for the electronic dissemination of its reports in image format. In a related effort, we are piloting a project with the National Technical Information Service (NTIS) of the Commerce Department to make available certain NTIS image files to depository libraries.

REVOLVING FUND Operation of the Revolving Fund.-Instead of receiving direct appropriations to cover the cost of the products and services GPO provides, our revolving fund accepts reimbursements from other appropriations and the public that place orders for GPO products and services. The fund pays for work performed prior to receiving reimbursement from the customer. The fund must have sufficient cash to pay private sector printers and GPO operating expenses prior to receiving reimbursement from the ordering agencies or the public. In the case of the sales program, the fund purchases copies of publications for the sales inventory and receives payment when the publications are sold. The fund also makes expenditures for equipment and other capital improvements. The cost of capital improvements is reimbursed gradually to the fund over their useful lives from the benefiting customers. The four programs financed through the revolving fund are plant printing, printing procurement, sales of publications, and agency distribution services. The Congressional Printing and Binding Appropriation is used to reimburse the fund for the cost of services provided to Congress. The Salaries and Expenses Appropriation of the Superintendent of Documents is used to reimburse the fund for the cost of services provided in the distribution of publications as required by law.

Fiscal Year 1997 Financial Performance.—We are pleased to report that GPO's revolving fund generated consolidated net income from continuing operations of $11.6 million for fiscal year 1997, compared with a loss of $16.9 million for fiscal year 1996. However, the Department of Labor (DOL) has revised its estimate of GPO's long-term liability for workers' compensation, which could cause an increase of $23.9 million in accrued expenses for fiscal year 1997. We have requested a clarification of this estimate from DOL. In addition, the General Accounting Office has stated, in decision B-259508 (April 4, 1996), that GPO, pursuant to section 8147c of Title 5, U.S.C., is not required to pay an additional fee to the DOL's Office of Workers' Compensation Programs (OWCÞ) to cover its administrative costs. We have been seeking to obtain a refund of the amounts erroneously collected by the OWCP.

DOD Payment Issues.We have been experiencing payment problems with one of our largest customer agencies, the Defense Department. In our view, these problems stem largely from the creation of the Defense Printing Service, now known as the Defense Automated Printing Service (DAPS). At the end of fiscal year 1992, GPO’s accounts receivable from DOD were about $32 million. Unpaid DOD invoices over 60 days old amounted to about $9 million, or 28 percent of the total. Since 1993, total receivables and delinquencies from DOD have been increasing. As of December 31, 1997, total DOD receivables reached $52.7 million with unpaid invoices over 60 days amounting to $24.3 million, or 46 percent. Since then we have received several payments from DOD, reducing their receivables to approximately $37 million. Although we have made several changes to our accounting system to assist DOD in improving their payment record, none of these initiatives has been fully implemented by DOD. DOD's payment record is directly impacting our cash flow and creating the prospect of a cash shortage in our revolving fund. In an effort to streamline the accounting practices at DOD and end the late payment problems, GPO has developed an automated deposit account system that virtually eliminates GPO invoices. If DOD would use deposit accounts, it would save the taxpayers millions of dollars annually.

GAO Management Audit.-We are currently cooperating within the GPO management audit ordered by Congress in House Report 105–254, accompanying H.R. 2209, the Legislative Branch Appropriations Act for 1998. The audit is being conducted by Booz-Allen & Hamilton, Inc., under contract with the General Accounting Office. We have also implemented reforms to our sales program to assure that all disposals of excess stock comply with established guidelines.

Year 2000 Compliance.—We are cooperating with the General Accounting Office in its efforts to assess the status of year 2000 readiness in all legislative branch agencies, following the direction of the Chairman of this Subcommittee in a letter dated October 30, 1997. Our proposal to the JCP to bring our mainframe operating system into year 2000 compliance has been approved. We have formed an internal year 2000 program management office to work with the GAO, and have appointed year 2000 coordinators throughout GPO. We are continuing to conduct a review of all GPO computer systems to determine which systems will be converted, replaced, or retired. We estimate that the total cost of assuring year 2000 compliance at GPO, including the cost of all associated computer improvements that are either ongoing or planned and which also must be year 2000 compliant will be $8 million this fiscal year and $4 million in fiscal year 1999. These costs will be financed through our revolving fund. We are confident that the steps we are taking now will ensure the continuity of product and service provision to Congress, Federal agencies, and the public.

Future Capital Expenditure Requirements.Capital expenditures for major building repairs and maintenance, information systems, and production equipment will be a considerable drain on the revolving fund. GPÓ's buildings are old and require substantial maintenance. These services are not provided by the Architect of the Capitol but are financed by GPO. Over the next two years, necessary capital investments include about $6 million for replacement of air conditioning equipment. Elevator, roof, and electrical systems need repair, which will cost additional millions of dollars over the next few years. Information systems also account for major capital investment requirements. This year we will be implementing an information processing system for the Superintendent of Documents, at a cost of about $10 million. We will replace our mainframe computer with an enterprise server that will be year 2000 compliant, at a cost of about $1.8 million. As noted above, other significant expenditures will be required to bring all GPO computers and software into compliance with year 2000 requirements. Production equipment requirements include $1.6 million for computer-to-plate systems and $3.6 million for a passport printing and binding line. These expenditures will have to be funded either through GPO's revolving fund or through an alternative mechanism such as a line item appropriation, which was how GPO's air conditioning improvements during the 1970's were funded.

Statutory FTE Limitation.-For fiscal year 1999, we are requesting the deletion of the statutory limitation on our full-time equivalent employment (FTE's). GPO has reduced employment by more than 25 percent since early 1993. This reduction was accomplished through attrition and successfully lowered our costs while preventing interruptions in service to Congress, Federal agencies, and the public. However, some critical GPO areas, including those that serve Congress, are now fully reduced and cannot withstand further reductions without impairing performance and service provision. GPO is now at its lowest employment level in this century. Allowing us to manage our FTE resources within the constraints of our available funding, rather than under a statutory limit, will give us the flexibility necessary to continue providing essential services.

Mr. Chairman and Members of the Subcommittee, this concludes my prepared statement. I would be pleased to answer any questions you may have.

REVOLVING FUND Senator BENNETT. Thank you. Did GPO report losses in fiscal year 1997, and do you estimate any for fiscal year 1998?

Mr. DIMARIO. We did report losses in fiscal year 1997, as a result of a recalculation that was done of obligations to the Department cf Labor, and I think Mr. Guy may be able to speak more specifically to those.

Mr. Guy. In fiscal year 1997, the Department of Labor indicated that we should increase our liability under workers compensation by about $25 million. If we have to do that, and we are looking at that very carefully, then that may cause us to have to report a loss in 1997. If we do not have to increase our liability by that magnitude, then we would not be reporting a loss for 1997. As far as this year, we have lost some money in the revolving fund, to date. We are hoping that we can turn that situation around.

Senator BENNETT. Let me go back to the $25 million. Is that a one-time hit, or is that an indication you have to adjust your allocation for the liability for all future years?

Mr. Guy. It is an adjustment of our estimated liability in the future. The annual amount that we pay is about $6 million a year, and we have already established a future liability of about $25 million. The Department of Labor has given us figures saying that we need to double that estimate of our future liability.

Senator BENNETT. But I am still not understanding. Can you get to the future liability of, say, $50 million, total, assuming they are correct, and I understand you are challenging their number

Mr. GUY. Yes, sir.

Senator BENNETT. Let us assume for a moment they are correct with the $50 million number, can you get there with a one-time hit of $25 million, or are you saying you are going to spread the $25 million out over a number of fiscal years, so there will be, say, a $4 million hit for 1997, and so on, until you get

Mr. Guy. That is correct. We would actually pay it on a cash outlay basis over a number of years into the future, but they are telling us to recognize that liability now. It is a change in estimate at this time, but we would be able to pay it out over

Senator BENNETT. On your books, do you have it reserved for the liability?

Mr. Guy. We do not have a cash reserve for it, no, sir. It would have to be paid out of available revolving fund cash. We have reported so far a $25 million liability, and we have taken that out of fund equity, as we report it.

Senator BENNETT. Do you have an existing $25 million

Mr. DIMARIO. Yes, sir; our revolving fund has a substantial amount of assets. Against the total value of the revolving fund we have certain obligations that are booked against it. The $25 million is among those obligations. The total revolving fund assets includes a cash balance in Treasury, like a bank account. There are limits to the amount of available cash that we have. The fund is used to pay our contractors and others before we get reimbursed for the work from the agencies.

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